(A) General requirements.
(1) Financial security required by this section shall be in the form of a federal or Commonwealth chartered lending institution irrevocable letter of credit, a restrictive or escrow account in such an institution or a financially responsible bonding company, cash or cash equivalent, or such other type of financial security as may be approved by the borough. The lending institution or bonding company, as applicable, may be chosen by the party posting the financial security, provided that the said lending institution or bonding company is authorized to conduct business within the Commonwealth, is acceptable to the Borough Council, is a member of FDIC and stipulates that it will submit to state jurisdiction and the county venue in the event of legal action.
(2) No single restricted escrow account shall contain an amount in excess of $100,000.
(3) All agreements for guarantees required by this section shall be executed by the applicant or developer and shall be approved by the borough upon advisement of the Borough Solicitor.
(B) Improvements guarantee.
(1) If financial security has been provided in lieu of the completion of improvements required as a condition for the final approval of a subdivision or land development proposal, as provided for by § 154.035(D), the borough shall not condition the issuance of a building, grading or other permit relating to the erection or placement of improvements, including buildings, upon the lots or land as depicted upon the approved final plan upon actual construction of the said improvements. Moreover, if financial security has been provided, occupancy permits for any building or buildings to be erected shall not be withhold following:
(a) The completion of the construction of new streets as described in this chapter in all respects except for the installation of the wearing course; and
(b) The completion of all other improvements as depicted upon the approved final plan, either upon the lot or lots or beyond the lot or lots in question if such improvements are necessary for the reasonable use of or occupancy of the building or buildings.
(2) The applicant shall deposit with the borough financial security in an amount equivalent to 110% of the estimated cost of completion of all improvements, including engineering and inspections costs, as of 90 days following the completion date anticipated by the applicant. All improvements, both public and private, shall be included in the cost estimate shall be all improvements and common amenities, both public and private including, but not limited to, streets, walkways, shade trees, stormwater management facilities, open space improvements, buffer or screen plantings, water mains and other water supply facilities, fire hydrants and sanitary sewage disposal facilities.
(3) The cost estimate shall be submitted by the applicant, shall be prepared by a professional engineer licensed as such by the Commonwealth, and shall be certified by such engineer to be a fair and reasonable estimate. The borough, upon the recommendation of the Borough Engineer, may refuse to accept such estimate for good cause shown. If the borough and the applicant are unable to agree upon an estimate, then the estimate shall be recalculated and recertified by another, neutral, professional engineer licensed as such by the Commonwealth and chose mutually by the borough and the applicant. The estimate certified by the neutral engineer shall be presumed fair and reasonable, and shall be the final estimate. In the event that a neutral engineer is so chosen, fees for services of said engineer shall be paid equally by the borough and the applicant.
(4) When requested by the applicant, the borough shall furnish the applicant with a signed copy of a resolution indicating approval of the final plan contingent upon the provision of financial security by the applicant. The final plan shall not be signed or recorded until the improvements guarantee has been executed. The resolution and letter of contingent approval shall expire and be deemed to be revoked if the financial security agreement is not executed within 90 days, unless a written extension is granted by the Borough Council. Request for such extension by the applicant shall be in writing.
(5) The said financial security shall provide for, and secure to the public, the completion of all subdivision improvements for which such security is being posted within one year of the date fixed on the subdivision plan and improvement construction plan for completion of such improvements.
(6) The borough may adjust the amount of the improvements guarantee annually by comparing the actual cost of the improvements which have been completed and the estimated cost of the completion of the remaining improvements as of the expiration of the ninetieth day after either the original date scheduled for completion or a rescheduled date of completion. Subsequent to said adjustment, the borough may require the applicant to post additional security in order to assure that the amount of the improvements guarantee will equal no less than 110% of the cost of the remaining improvements at all times.
(7) If the party posting the improvements guarantee requires more than one year from the date of posting the guarantee to complete the improvements, the amount of the guarantee shall be increased by an additional 10% for each one-year period beyond the first anniversary date from the date of the original posting. The new amount shall not exceed 110% of the cost of completing the remaining required improvements as established upon the expiration date of the preceding one-year period.
(8) Where development is projected over a period of years, the borough may authorized submission of final plans by section or phase of development, subject to such requirements or guarantees for improvements within the future sections or stages of development as Borough Council may deem essential for the protection of any finally approved section or phase of the development.
(9) As the work of installing the required improvements proceeds, the party posting the improvements guarantee may request the Borough Council to release or to authorize the release of such portions of the improvements guarantee necessary for payment to the contractor(s) performing such work. Any such requests shall be in writing, addressed to the Borough Council. Council shall have 45 days from the receipt of such request within which to allow the Borough Engineer to certify in writing to the borough that such portion of the work upon the improvements has been completed in accordance with approved plans. Upon such certification, Council shall authorize release by the bonding company or lending institution of an amount as estimated by the Borough Engineer fairly representing the value of the improvements completed. If Council fails to act within the said 45-day period, Council shall be deemed to have approved the release of funds as requested.
(10) The Borough Engineer, in certifying the completion of work for a partial release, shall not be bound to the amount requested by the applicant, but shall certify to Borough Council his or her independent evaluation of the proper amount of partial releases.
(C) Release from improvements guarantee.
(1) (a) When the developer has completed all improvements according to agreement, he or she shall so notify the borough and the Borough Engineer in writing by certified or registered mail. Upon receipt of such notice, the Borough Council shall direct the Borough Engineer to make a final inspection of the improvements covered by the guarantee.
(b) The Borough Engineer shall file a report in writing with the Borough Council, and shall promptly mail a copy of the report to the developer by certified mail. The report shall be made and mailed within 30 days after receipt by the Borough Engineer of the notification from the developer. The report shall be detailed and shall indicate his or her recommendation of approval or rejection of improvements, whether in whole or in part. If the Borough Engineer recommends nonapproval or rejections of the improvements, or any portion thereof, the report shall state the reasons for such recommendation.
(2) The Borough Council shall notify the developer in writing by certified mail of the action of Council with regard to approval, nonapproval or rejection of the improvements.
(3) If any portion of the improvements shall not be approved or shall be rejected by Council, the developer shall proceed to complete those improvements. Upon completion, the same procedure of notification and inspection as described hereinabove shall be used.
(4) Ten percent of the improvements guarantee shall be held back by the borough until the developer has posted a performance guarantee, as required by division (D) below.
(D) Performance guarantee.
(1) The developer shall be responsible for maintenance of all subdivision or land development improvements until such improvements are offered for dedication and are accepted by the borough or have been placed under the control of a community association.
(2) Where the Borough Council accepts dedication of all or some of the required improvements following completion, Council shall require the posting of financial security for the structural integrity of the improvements and the functioning of the improvements in accordance with the design and specifications as depicted on the final plan.
(3) The security required shall be in the form required by division (A) above, shall be for a term of 18 months from the date of the completion of the improvement(s), and shall be in an amount equal to 15% of the actual installation cost of the dedicated improvements.
(E) Other financial security. If water mains, sanitary sewer lines, or both, along with apparatus or facilities related thereto, are to be installed under the jurisdiction of and pursuant to the rules and regulations of a public utility or borough authority separate and distinct from the borough, financial security to assure proper completion and maintenance thereof shall be posted in accordance with the regulations of the controlling public utility or borough authority. Such funds shall not be included within the financial security required by this section.
(Prior Code, Ch. 22, § 611) (Ord 173, passed 10-5-1970, § 611; Ord. 323, passed 7-6-1998)